A federal judge in Mississippi, citing the need for more information, has rejected — at least temporarily — a settlement by State Farm Insurance that was expected to provide several hundred million dollars to help policyholders rebuild homes destroyed by Hurricane Katrina 17 months ago.
In an eight-page order, Judge L. T. Senter Jr. of Federal District Court in Gulfport, Miss., said he was rejecting the agreement because it did not provide enough information for him to conclude that it was “fair, just, balanced and reasonable.”
State Farm said last night that it had expected the agreement to be approved and that it now looked forward to addressing the judge’s concerns.
In the agreement, State Farm said it would pay at least $130 million to policyholders and participants in the negotiations and said costs to the insurer could increase by another $600 million. The State Farm settlement was expected to be a model for other insurers to use in seeking settlements, which would help jump-start the lagging recovery of Mississippi’s coast.
